Zhou Wangjun, vice director of the NDRC's prices department, said in comments posted on the central government website that China's macroeconomic measures are geared towards having a market-oriented pricing mechanism.

At the end of 2006, the government was controlling the prices of less than 5 pct of commodities and services, he said.

"We only intervene in few commodities, such as grain, edible oil, meat, milk and liquefied petroleum gas......In addition, we only intervene in a few enterprises," Zhou added.

The National Development and Reform Commission (NDRC), China's top economic planning agency, said yesterday that the government began "temporary price intervention" in a range of daily-necessity items including grain, edible oil, meat, milk and liquefied petroleum gas.

Under the new rules, major producers of the items are required to submit any price-hike plans to the government for approval 10 days prior to the actual proposed hike.

Zhou said the government will conduct a strict review on any application for a price hike